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The European Central Bank meeting is on June 5. It is among the most important events of the first half and possibly the entire year. After much preparation and jawboning, the ECB is widely expected to take unconventional measures counter the low inflation and risk of deflation. It may also announce fresh initiatives to help facilitate financin…

Some of the commentary on this blog has a short shelf life. It is meant to put the day's events into a larger context. There are other pieces posted that aim to provide an interpretative framework or look at an issue in greater detail.
In the past few days there have been four such thought pieces. It might be helpful to put them in one p…

This Great Graphic was tweeted by Emerging Market Equity. The charts come from the Institute of International Finance and also draws on data from EPFR, which tracks investment flows. What we are looking at here is retail participation in emerging markets. The chart on the left shows that since 2009, retail investors have bought nearly three time…

There are two main forces at work in the capital markets today. First is the month-end flows and position adjustments. These are weighing on the dollar and global bonds and, for the most part equities, though European bourses are mixed. Second is the macroeconomic news that shows a greater than expected impact of the Japanese sales tax increase…

Month End Flows and Position Adjustment Dominate
Reviewed by Marc Chandler
on
May 30, 2014
Rating: 5

The bond market rally remains among the most significant
surprises of the year. This is especially true for the US Treasury
market, which, even if G-Zero hypothesis is valid, remains the critical global
benchmark. Fed tapering was widely expected to push up US yields. Instead,
they have fallen. The 10-year yield is off 60 bp this year,and near…

Thoughts on the Bond Market Conundrum
Reviewed by Marc Chandler
on
May 29, 2014
Rating: 5

(from my colleagues Dr. Win Thin and Ilan Solot)
1) Brazil central bank has paused its tightening cycle
2) The election of Petro Poroshenko as President of Ukraine should help lower tensions with Russia
3) The South African government is launching a task force to try to resolve the mining dispute with a new Mining Minister
4) The Thai army seems …

Emerging Markets: What has Changed
Reviewed by Marc Chandler
on
May 29, 2014
Rating: 5

This Great Graphic was posted by Derek Thompson at The Atlantic. For a selected group of countries, the chart depicts the minutes spent per day on various devices: television, computer (PC and laptop), smartphone and tablet. Thompson's article also provides additional tables, some interactive, that will rank the countries by the medium. On…

Great Graphic: International Comparison of Media Consumption
Reviewed by Marc Chandler
on
May 29, 2014
Rating: 5

The Great Bond Conundrum is unlikely to be resolved today, but the global capital markets appear to be taking a pause today, helped in part by the Ascension Day holiday that has thinned activity in Europe. The attempt to extend the euro and sterling's recent losses was not very satisfying, and a short covering bounce lifted the tone in late mo…

Thursday in Five Points
Reviewed by Marc Chandler
on
May 29, 2014
Rating: 5

Next week's ECB meeting could very well prove to be among the most important events of the year. It has taken ECB President Draghi's leadership and increased risk of lowflation if not deflation to forge an apparent consensus at the central bank that more action is needed.

These Great Graphics were posted on The Atlantic by Derek Thompson. According to BLS data, the average American household increased its spending by $800 last year (to $51, 400). The first chart shows how that money was spent. Almost 2/3 (62%) was on transportation. The blue bars, in order, are misc transportation, used vehicles and new vehicl…

Great Graphic: US Household Consumption
Reviewed by Marc Chandler
on
May 28, 2014
Rating: 5

The US dollar remains firm against most of the major and active emerging market currencies. The euro and yen have thus far remained confined to yesterday's ranges while sterling saw yesterday's losses extended, following yesterday's reversal. US 10-year Treasury yields have pushed back below 2.5%, which seems to cap the dollar near JPY…

What ultimately led US President Nixon to close the gold window was not its Cold War rival Russia. Rather it was US European allies who wanted to exchange their dollars for gold beyond levels that the US was prepared to accept. This has been a consistent theme through today. As the German foreign minister put it, European officials got too excited…

Friends not Enemies Pose the More Difficult Challenge
Reviewed by Marc Chandler
on
May 27, 2014
Rating: 5